Energizer 2001 Annual Report Download - page 3

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CURRENT BUSINESS CLIMATE
Competition is more intense than ever as market conditions have deteriorated.
On a global basis, growth in the battery category has slowed from historic levels
of nearly 7 percent on a unit basis. Device sales, which drive the category, have
fallen dramatically, and retail foot traffic is off, resulting in lower impulse-driven
battery purchases. In response, major retailers have reduced inventories, further
depressing sales volumes.
With slower category growth, the level of competition has increased with the
major players vying for a bigger share of our retail partners’ purchases. We face
tough competitors with substantial resources striving to increase market share.
Longer term, volume growth should return to the battery category as world
economies recover, although price competition will likely remain. Success will
require cost competitiveness as well as the delivery of superior value to retail
customers and the consumer.
FINANCIAL RESULTS
Our financial results in fiscal year 2001 were clearly disappointing, following
a good year that benefited from the Y2K buying surge. Sales fell from $1.9 billion
MESSAGE TO OUR
shareholders
ENERGIZER’S FIRST FULL YEAR AS A STAND-ALONE COMPANY
PROVED TO BE EXTREMELY CHALLENGING AND VERY DISAPPOINTING.
VOLUME GROWTH SLOWED DRAMATICALLY DURING THE YEAR, AND WE
WERE FACED WITH INCREASED COMPETITION AND A CONSOLIDATING
CUSTOMER BASE. WE ALSO EXPERIENCED CURRENCY DEVALUATIONS
IN A NUMBER OF KEY OVERSEAS MARKETS. THE END RESULT WAS
FINANCIAL PERFORMANCE FAR BELOW FISCAL 2000.
to just under $1.7 billion, an 11 percent decline. Earnings per share fell from
$1.60 to $0.93. Our share price fell from $24.50 at the end of last fiscal year to
$16.62 at September 28, 2001.
TAKING THE INITIATIVE
Since we cannot control external events, we are concentrating our efforts
on those areas we can influence. We are taking appropriate actions to
address the current business climate and adapt to the new realities of the
marketplace. To that end, we are:
1. Managing our business to maximize cash returns.
2. Streamlining our global operations to reduce costs
and rationalize capacity.
3. Reducing global overhead.
4. Reinvesting some of these savings to strengthen the
Energizer consumer franchise through increased advertising.